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18. In our case by virtue of the fact that there is a pari passu charge in favour of the workmen, the company court was fully justified in imposing conditions in an application by the secured creditor to stay outside the liquidation proceedings. The conditions laid down by the court, in fact,, save the secured creditor from the fetters of section 537 of the Companies Act, 1956. It is in this context that we have to consider the provisions of section 537 of the Companies Act, under which leave was asked for by the appellant for conducting sale. The decision of the Supreme Court in the case of M. K. Ranganathan v. Government of Madras , dealt with a situation where there was no pari passu charge and the secured creditor had obtained possession of the property of the company before the company went into liquidation. In such a situation, the Supreme Court upheld the right of the secured creditor to sell the security without the intervention of the court and hence, the leave of the company court was held not necessary under section 537 of the Companies Act, 1956. But in a situation where the official liquidator, as a representative of the workmen had a pari passu charge on the property of the company over which security was created in favour of the appellant-corporation, it is difficult to appreciate how the secured creditor can sell the property outright ignoring the official liquidator of the court. Under section 537(1)(b) of the Companies Act, 1956, any sale held without the leave of the court of any of the properties or effects of the company after commencing of the winding up is void.

(c) so much of the debt due to such secured creditor as could not be realised by him by virtue of the foregoing provisions of this proviso or the amount of the workmen's portion in his security, whichever is less, shall rank pari passu with the workmen's dues for the purposes of section 529A."

21. It could thus be seen that the official liquidator is conferred with the power of representing the workmen and enforcing the pari passu charge in favour of the workmen. For the purpose of ensuring that the duties cast upon the official liquidator for enforcement of the pari passu charge of the workmen, it is absolutely necessary that the official liquidator should be so empowered by the company court as to discharge his function effectively. Reverting to the conditions imposed upon the financial corporation, by the impugned order it is evident that the same have been imposed with a view to enabling the official liquidator to discharge his functions effectively. The first condition calling upon the financial corporation to undertake to discharge its liability due to the workers regarding wages has not been disputed by learned counsel for the appellant-corporation. The second condition imposed, makes it obligatory on the financial corporation to intimate the official liquidator at least 10 days in advance before the date fixed for receipt of tenders for the purpose of selling the properties of the company. The imposition of this condition, by no stretch of imagination, would be treated as a constraint on the power of the financial corporation to realise its security be remaining outside the liquidation proceedings. The condition only facilitates the official liquidator to discharge his duty and to see that pari passu charge in favour of the workmen is not frustrated or truncated in any manner.

26. Referring to the arguments of Mr. Y. Shivarama Sastry, learned counsel for the appellant, during the course of his submissions he relied upon a decision of the Rajasthan High Court in the case of Boolani Engineering Corporation v. Asup Synthetics and Chemicals [1994] 81 Comp Cas 872, in which the court has held that the option of a State Financial Corporation, as a secured creditor of a company, to remain outside the winding up of the company was not affected by the insertion of section 529A of the Companies Act. Despite the fact that winding up had commenced, the financial corporation having taken possession of properties, charged to it, in exercise of the powers under section 29 of the State Financial Corporations Act, 1951, and the charge having been registered by the Registrar of Companies, the corporation was entitled to put properties to sale for realisation of its dues and that section 537 of the Companies Act would not apply, as the sale was not through the intervention of the court. There could be no two opinions about the fact that the financial corporation was entitle to put properties to sale for realisation of its dues under section 29 of the State Financial Corporation Act, 1951, and that section 537 of the Companies Act would not apply. However, the amendment to section 529 of the Companies Act, and the insertion of new section 529A by the Amendment Act (35 of 1985), made it obligatory upon the liquidator to represent the workmen and enforce the pari passu charge in favour of the workmen and to ensure that the amount realised was applied rateably for the discharge of workmen's dues which made it necessary for the court to intervene and impose conditions which may be found necessary for the realisation of the pari passu charge in favour of the workers. In that view of the matter, in spite of the fact that the right of the financial corporation to realise its dues under section 29 of the State Financial Corporations Act, 1951, could not be interfered with, the imposition of conditions to be observed by the financial corporation could not be dispensed with and could not be treated as an illegal encroachment on the right of the financial corporation.

28. We have no dispute in the present case with the proposition of law that the secured creditor was entitled to stay outside the liquidation proceedings and realise its dues even in a case where a pari passu charge of the workmen was found to exist. However, respectfully we are not in agreement with the view expressed in the aforesaid decision of the Karnataka High Court that the security could not be taken away by any court in its endeavour or anxiety to place a construction on such provisions as could benefit the workmen. We have held that reasonable conditions could be imposed simultaneously with allowing the financial corporation to realise its dues by staying outside the liquidation proceedings when the question of discharging the pari passu charge of the workmen emerges for consideration. It is not our intention to say that the conditions could be imposed for the benefit of the workmen, but our anxiety is to ensure that the dues of the workmen which stand, by a legal fiction, on par with the charge of the secured creditor should be allowed to be rateably apportioned and paid. For the purpose of determining the rateable portion of the workmen's dues, even at the cost of repetition, we must recapitulate the factors to be taken into consideration for the purpose of arriving at such rateable distribution. Under the amended portion of section 529 of the Companies Act, the following factors are required to be taken care of (a) that the liquidator should be enabled to enforce the charge of the workmen; (b) that the amount realised by the liquidator by way of enforcement of such charge should be applied rateably for the discharge of the workmen's dues; and that (c) so much of the debt due to such secured creditor as could not be realised by him by virtue of the provisions of new proviso to sub-section (1) of section 529 of the Companies Act, or the amount of workmen's portion in his security, whichever is less, is held to rank pari passu with the workmen's dues for the purpose of section 529A."Workmen's portion", in relation to the security of any secured creditor of a company, means the amount which bears to the value of the security the same proportion as the amount of the workmen's dues bears to the aggregate of - (i) the amount of workmen's dues; and (ii) the amounts of the debts due to the secured creditors, as defined in clause (c) of sub-section (3) of section 529 of the Companies Act.